The Zacks Analyst Blog Highlights: Monsanto, Dow Chemical, Syngenta AG, The Scotts Miracle-Gro and NYSE Euronext
CHICAGO, Aug. 25, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Monsanto Co. (NYSE: MON), Dow Chemical Co. (NYSE: DOW) Syngenta AG (NYSE: SYT) The Scotts Miracle-Gro Co. (NYSE: SMG) and NYSE Euronext Inc. (NYSE: NYX).
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Here are highlights from Wednesday's Analyst Blog:
Monsanto Fears Losing Soy Market
Monsanto Co. (NYSE: MON) fears losing market share for Roundup Ready Soy as Dow Chemical Co. (NYSE: DOW), the biggest U.S. chemical maker, launches a genetically altered soybean seed. Dow has planned to stop the use of Monsanto's widely licensed technology as well, in the next generation of its Enlist genetically modified soybeans.
The second generation of Enlist was recently submitted to the U.S. Department of Agriculture for approval, which DOW expects to achieve by "mid-decade". Once approved, these soybeans are anticipated to substitute Monsanto's brand of glyphosate weedkiller resistance for genetics, developed with M.S. Technologies LLC.
After Monsanto introduced its first Roundup Ready soybean in 1996, farmers started killing weeds easily through the system. But since then, glyphosate use over Roundup Ready soybeans, corn, cotton etc increased heavily and several species of crop-choking weeds have become resistant to glyphosate-based Roundup. Thereafter, these weeds started spreading rapidly through North and South America.
With the launch of Enlist system, Dow sees replacement for Monsanto's popular Roundup Ready system that accounts for more than 90% of U.S. soybean acreage as well as corn. Dow plans to target customers using Monsanto's Roundup Ready seeds and Roundup glyphosate weedkiller claiming that the U.S. farmers may now combat weeds that are no longer killed by Roundup herbicide of Monsanto.
Dow plans to start selling the first generation of Enlist herbicide tolerance by 2013 in corn, 2015 in soybeans and 2016 in cotton, pending regulatory approvals. Dow forecasts generation of approximately $1.5 billion of profit from herbicide and seed sales, which is anticipated to arrive as a direct assault on the dominance of global seed leader Monsanto Co.
Missouri-based Monsanto Company, together with its subsidiaries, is a leading global provider of agricultural products for farmers in the United States and internationally. Monsanto's biotechnology research and rich product pipeline provides strong competition to its peers, such as Dow, Syngenta AG (NYSE: SYT), The Scotts Miracle-Gro Co. (NYSE: SMG) and BASF SE.
We currently maintain a long-term Outperform recommendation on the stock. Monsanto has a Zacks #2 Rank, which translates into a short-term Buy rating (1-3 months).
NYSE-Boerse Merger Clears CFI
Yesterday, NYSE Euronext Inc. (NYSE: NYX) reached another milestone on receiving a green signal for its merger with Deutsche Boerse from the Committee on Foreign Investment (CFI) in the US.
The CFI is a prime regulatory body in the US comprising government officials representing the justice, commerce, state, defense and homeland security departments. The board of CFI scrutinizes all the international mergers made by the US-based organizations.
Both NYSE and Deutsche Boerse successfully completed the first lap when last month both the companies managed to attain the consent from their respective majority shareholders. The sanction from CFI has been a further impressive advancement in this merger process.
While a roar of merger and acquisition activities took place in the past three quarters, most of them never saw light due to the regulatory snags, which reflects the significance of the regulatory processes. The London Stock Exchange failed to take over Canada's TMX Group and Singapore stock exchange was also unable to acquire Australian stock exchange owing to opposition from regulatory authorities in both the countries.
Strongest Exchange Merger Ever
The NYSE-Deutsche Boerse merger is expected to be the most solid business combination in the history of the global stock exchanges. Based on 2010 net revenues, the prospective merger will earn approximately 37% of total revenue from derivatives trading & clearing, 29% in cash listings, trading & clearing, 20% in settlement & custody and 14% in market data, index & technology services.
Moreover, the prospective merger is expected to generate full run-rate cost synergies of euro400 million ($580 million) along with euro150 million ($218 million) in revenue synergies.
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